Let them eat cake, and pay VAT: A consistent taxation policy could help to reduce obesity

 

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Tucking into chocolate cake, at least to excess, is not the way to avoid Type 2 diabetes, a disease which, Public Health England warns us, will strike one in 10 of the British population in due course. That much even the most wilfully ignorant trencherman might understand.

But the nation’s grip on the healthiness of various foodstuffs is insecure, despite the efforts of the state, food manufacturers and retailers to be more honest about what we eat. The introduction of “traffic-light” labelling, indicating levels of salt, sugar and fat contained in packaged foods, has made some impact, as has the “five-a-day” campaign encouraging consumption of fruit and vegetables. But rising obesity rates suggest the work of public health education is not complete.

What might help is a rational, health-driven approach to taxation of naughty-but-nice treats. Paradoxically, while a chocolate cake, in its unalloyed form, is judged exempt from VAT, one with raisins is taxed at 20 per cent VAT – at least on the raisin content. Whether HMRC officials are let loose on a sample to count the number of raisins per portion, or whether they just “guess the number” as if they were at a village fete, the general fiscal approach to cake is inconsistent. Still, maybe that is because such puzzles are what might be termed HMRC’s “raisin d’être”.

So the tax authorities don’t always point us clearly in the right direction. Value Added Tax, with its complex web of exemptions, tends to confuse, as the great pasty tax imbroglio of 2012 reminded us. The tax folk also ran a long guerrilla war against the makers of Jaffa Cakes to bring them within the Treasury’s ambit. (Jaffa Cakes won, so you should turn to a Hobnob or a Party Ring if you want to help pay off the national debt.) The obvious answer is to take the tax off biscuits – fattening but a vote-winner – or add VAT to cakes, which has obvious drawbacks.

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